Gruppo Campari Q3 boosted by global brands

7th November, 2017 by Nicola Carruthers

Italian drinks firm Gruppo Campari has reported “very good results” for the first nine months of 2017, driven by strong performances from its core portfolio of global and regional priority brands.

Gruppo Campari has reported an 8.1% increase in its third quarter of 2017

The drinks group’s sales grew 8.1% to €1,275.8 million and 6.2% organically, driven by the strong organic growth of global priorities (7.4%) and regional priorities (13.5%).

The exchange rate effect was “slightly positive” at 0.3% after a negative impact in the third quarter, driven by the progressive strengthening of the euro against many of the group’s key currencies.

Campari said it benefitted from a 1.6% combined increase from the acquisition of Grand Marnier in June 2016, the termination of some distribution agreements, the sale of its entire wine business and the sale of its Carolan and Irish Mist brands in July.

The Americas, which represents 44.5% of the total group’s sales in the third quarter, posted an overall increase of 15%. The group’s largest market, the US, accounted for 27.5% of total group sales. The group reported a 4.2% increase, despited the impact of the hurricanes on the portfolio.

In terms of brands, Aperol continued to “outperform”, reporting a 19.5% increase, driven by the brand’s core markets of Italy, Germany, Austria and Switzerland, despite poor weather conditions in central Europe.

Campari continued its positive momentum, up 7.4% organically, driven by “very good” performance in the US, France, Austria, Brazil, Japan, Argentina and Jamaica, as well as Italy.

Skyy vodka’s sales decreased by 5.7%, due to a “weak” third quarter in the US following the impact of hurricanes on shipments in key states, as well as weakness in the flavoured vodka category.

Wild Turkey registered a positive gain of 5.1%, driven by the US market. Jamaican rums, Appleton Estate, J.Wray and Wray & Nephew Overproof, showed a positive organic growth of 6.4% with a positive performance in Jamaica, UK, US as well as Mexico.

Grand Marnier registered a solid double digit growth of 11%, driven by the core US and Canadian markets.

“We delivered very good results in the first nine months of 2017, delivering sustained growth, both in organic and reported terms, across all performance indicators,” said Bob Kunze-Concewitz, chief executive officer.

“The sustained gross margin expansion, which benefitted from the continuous improvement of our sales mix by brand and region, helped contain the progression of A&P and SG&A investments, albeit gradually normalising during Q3, as expected. These effects led to a slight margin dilution in organic operating margin in the first nine months. Looking at the remainder of the year, our outlook remains fairly balanced and unchanged.

“Macroeconomic environments in some emerging markets remain uncertain whilst the political uncertainty persisting in some regions might continue fuelling the volatility of major currencies against the Euro. Nevertheless, we remain confident in achieving a positive performance across key indicators for the year, driven by the outperformance of the high-margin global and regional priorities in key developed markets.”

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